"Bitcoin's true value the cost to mine one" - page 2.

Eternu

sr. member

Activity: 560

Merit: 257

Quote from: rehydrogenated on April 06, 2018, 03:01:23 PM

Maybe I understand this wrong, but wouldn't bitcoin's price rise if demand for bitcoins remained the same and the cost to mine bitcoins increased? Why would the cost of mining a bitcoin correlate to the price of bitcoin? I think that is only true while the BTC price > Cost of electricity + Hardware + Time. It is totally possible that BTC price < Cost of electricity + Hardware + Time and the miners are producing bitcoins at a loss until they switch off their machines and the difficulty resets.

If anything the fact that we continue to mint new bitcoins puts downward pressure on the price of bitcoin.

If demand for bitcoins remained the same, price would rise only to some extent. And that point depends on people willingness of paying. So as long as people are willing to buy bitcoin, new miners will join, and upkeep for mining will rise. When cost of mining reach certain point, people would leave like you said it would happen. Need for miners is limited, and because of that its not always profitable. And that is how I see whole picture of correlation between bitcoins price and mining.

rehydrogenated

full member

Activity: 266

Merit: 101

Maybe I understand this wrong, but wouldn't bitcoin's price rise if demand for bitcoins remained the same and the cost to mine bitcoins increased? Why would the cost of mining a bitcoin correlate to the price of bitcoin? I think that is only true while the BTC price > Cost of electricity + Hardware + Time. It is totally possible that BTC price < Cost of electricity + Hardware + Time and the miners are producing bitcoins at a loss until they switch off their machines and the difficulty resets.

If anything the fact that we continue to mint new bitcoins puts downward pressure on the price of bitcoin.

trumper

full member

Activity: 406

Merit: 102

I agree with you, The cost of mining btc alone doesn't reflect it's true value, and probably it will not be mined till that date, its value depends on a lot of factors, mining cost is just one of them.

Eternu

sr. member

Activity: 560

Merit: 257

Quote from: BillyBobZorton on April 06, 2018, 01:21:14 PM

Why do some people think this is accurate?

The cost to mine 1 BTC varies a ton depending where you are at, so this would mean if you are from China the cost will be cheaper than in Canada for instance, but this is not all. There are many other variables.

So you would need to create a global average I guess, but even then, how is this accurate?

Electricity cost is not equal in all countries, and because of that mining bitcoin is not equally profitable. Those who are confused by this, doesn't know enough about mining. And I guess it would be impossible to make global average price for mining, I don't see point for that.

Quote from: BillyBobZorton on April 06, 2018, 01:21:14 PM

How could 1 unit of Bitcoin be only worth it's cost to mine one (which by the way I think it's around the current price) when it's marketcap is so tiny?

I am not sure if that is correct, those odds sounds a bit crazy if you ask me. No one would mine BTC if they would need 1 BTC to mine one back. Also, bitcoins cap is large enough if you ask me.

Quote from: BillyBobZorton on April 06, 2018, 01:21:14 PM

It's insane to assume that you have to wait until 2140 to reach "the moon". Bitcoin's features are the same irrespective of how many halvings away we are from that. The cost of mining one doesn't reflect it's true value. The hashrate is strong enough to be as safe as it gets to use a store of value. If anything, it shows me that it's insanely undervalued.

Maybe BTC will never reach "the moon" , everything is possible after all. Also you are correct about true value of BTC, but I'm not sure if its undervalued. I know for sure that it will stay as volatile, as long as people are looking on BTC as an investment and not for what it is.

BillyBobZorton

legendary

Activity: 1204

Merit: 1028

Why do some people think this is accurate?

The cost to mine 1 BTC varies a ton depending where you are at, so this would mean if you are from China the cost will be cheaper than in Canada for instance, but this is not all. There are many other variables.

So you would need to create a global average I guess, but even then, how is this accurate?

Bitcoin is a viable substitute for gold, but just better. How could 1 unit of Bitcoin be only worth it's cost to mine one (which by the way I think it's around the current price) when it's marketcap is so tiny?

It's insane to assume that you have to wait until 2140 to reach "the moon". Bitcoin's features are the same irrespective of how many halvings away we are from that. The cost of mining one doesn't reflect it's true value. The hashrate is strong enough to be as safe as it gets to use a store of value. If anything, it shows me that it's insanely undervalued.

Topic: "Bitcoin's true value the cost to mine one" - page 2. (Read 240 times)